Whitehaven suspends buybacks amid “strong support” for growth spending

afr.com:

Whitehaven Coal managing director Paul Flynn says he has strong shareholder support for spending on growth as he temporarily suspended the miner’s share buyback program to preserve cash for a tilt at BHP’s coking coal mines.

Fresh from reporting a $2.66 billion profit, Mr Flynn declined to confirm whether Whitehaven had bid for the BHP assets but noted they would fit with his long-held strategy to grow the company’s exposure to coking coal.

Whitehaven is considered one of the favourites in the multibillion-dollar race to buy BHP’s Daunia and Blackwater mines, despite London hedge fund Bell Rock’s campaign to pressure Whitehaven into returning cash to shareholders rather than spending on growth.

Bell Rock’s campaign included a survey of Whitehaven shareholders, but Mr Flynn said he had also conducted surveys of investors and found support for growth spending.

“We do a lot of work engaging with shareholders… we have recently conducted a perception survey which was very useful,” he said.

“There is a diversity of views there, but there is strong support for us to continue to grow.

“The notion of Whitehaven continuing to grow has been something that has been well understood by shareholders that have been there for any length of time.”

Mr Flynn reiterated that any future spending on acquisitions would likely be on coking coal for steelmaking, rather than the thermal coal for power generation; the latter accounted for 94 per cent of sales volumes in the past year.

“It would be targeting more metallurgical coal into our mix as we try and build the proportion of our revenue that is generated from that segment,” he said.

Mr Flynn trumpeted Whitehaven’s record on returning cash to shareholders, saying the company had paid more